3 'Boring' Essentials Every Successful Business Owner Must Deal With
Even businesses with great products and hungry markets can fail. If you don’t take care of the “boring” stuff, your company won’t last long enough to deliver on all the promises you made to your customers.
That’s not to say your product or service isn't an essential component of your success -- bad product-market fit is a top killer of failed startups. However, factors like lack of capital, inadequate management and marketing mishaps are more often to blame for turning both promising startups and established companies into tales of what could have been.
To avoid joining the league of companies that didn’t quite make it, business owners need to pay attention to the back-office tasks that keep operations running smoothly. It doesn’t matter how dedicated your employees are or how revolutionary your product is: If paychecks don’t come on time, the electricity is off or an unexpected legal battle crops up, your odds of survival can plummet.
Take care of these "boring" tasks ahead of time so you can focus on the fun parts of growing your business:
1. Payroll Processing and Administration
No matter how lean your company runs, employees must have their paychecks on time every time. The moment people have to ask about the status of their direct deposits is the moment your best performers start looking for new opportunities.
Payroll processing and administration company OnPay recommends that companies follow a six-step process to get ahead of any payroll issues as soon as they start hiring employees. Businesses need to register with the IRS and, in some cases, state-specific agencies. They should also hammer out the logistics for paying employees ahead of time to ensure employees never have any reason to doubt their employer’s solvency.
The same is true of benefits beyond paychecks. Workers depend on their employers for health insurance, PTO and other perks. If an employee gets denied at the doctor’s office or docked pay for using earned PTO, she might wonder whether the business really has its affairs in order.
The bottom line? Don’t play around with payroll and benefits administration. Get it done first -- and get it done right -- to keep your team together.
2. Information Security
Good technology management shouldn't be reserved for technology companies. Any business with a computer in the building needs an IT plan that can scale with the company's needs.
Businesses that use customer data should be especially proactive in this area. Nothing can tank a promising startup more quickly than an early data breach that kills customer trust.
“Having the right technology in place is a critical line of defense when faced with hackers, malware, and other cyber threats,” says Erik Brown, chief technology officer at GigaTrust. “Smaller companies may do some of this manually, while larger organizations will want to automate as much as possible."
Get the best of both worlds by investing in good security from day one. Set up systems and databases that comply with new rules, such as GDPR. Don’t know what that means? Find someone who does. The upfront costs may be steep, but the long-term protections are more than worth the investment.
3. Business Insurance and Legal Protection
Your LLC can’t protect you from everything. Even if your company structure insulates you from certain lawsuits and judgments, you could still be held personally liable if someone gets injured on your property, if you accidentally break the law or if you’re careless about intermingling business and personal finances.
For a fairly low price, business liability insurance protects business owners from threats outside the norm. The Balance reports that most annual premiums fall somewhere between $750 and $2,000.
Different types of insurance cover different types of events. Product liability insurance, for example, protects companies if a product injures a customer. Professional liability insurance covers service-based businesses against errors that lead to losses. In many situations, businesses may be required by federal or local laws to carry insurance.
Owners should consult with a law firm to make sure they remain in compliance. However, law firms can do much more than help businesses mark checkboxes. Rather than wait until a small problem turns into an expensive legal battle, growing companies should work with lawyers early and often to protect themselves from future problems. Attorneys who help small businesses get set up are generally much cheaper than litigators who represent companies in messy court battles.
Business owners can't afford to ignore the details as they push their products and services. Only employees can do that. Things like payroll administration and business insurance might not be fun, but they're essential components for growing companies. If you want to run a successful business, you have to lay the "unsexy" groundwork first.